NEWS
Fund Review: Morphic Global Opportunities Fund October 2014
19 Nov 2014 - Australian Fund Monitors
The October Fund Review shows performance at 1.12% for the Morphic Global Opportunities Fund ahead of the Global Equity Index (0.36%) and a 12 month Sharpe ratio of 1.52. CPD Points available.
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19 Nov 2014 - Fund Review: Morphic Global Opportunities Fund October 2014
By: Australian Fund Monitors
MORPHIC GLOBAL OPPORTUNITIES FUND
Attached is our most recently updated Fund Review on the Morphic Global Opportunities Fund.
CPD Points are now available for all AFM Fund Reviews. Read the review and answer 5 questions to earn half a point toward your continuing professional development.
Key points include:
- The Fund is a global equity long/short manager with a long bias and a macro-economic overlay. The mandate allows the Fund to short sell, use derivatives and invest in assets such as commodities & currencies.
- Morphic's philosophy is that only funds with flexible investment and hedging strategies will be able to deliver acceptable, steady, real, absolute returns over the investment cycle.
- The Fund is an early stage, boutique, Sydney-based fund established in 2012 with experienced CIO's, and an investment team of 6 including a risk manager.
- The Board has a majority of independent members with significant risk and investment experience.
For further details on the Fund, please do not hesitate to contact us.
Sean Webster
Research Manager
Australian Fund Monitors
Totus Alpha Fund
18 Nov 2014 - Australian Fund Monitors
Totus Alpha Fund returned 0.87% during October and 15.65% over the prior 12 months with a volatility 8.94%.
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18 Nov 2014 - Totus Alpha Fund
By: Australian Fund Monitors
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| Fund Overview | The Fund is a long/short investment fund principally investing in listed entities, commodities, futures and options in Australia and internationally. The Fund is not a market neutral fund and accordingly may switch between net long positions and net short positions. The Fund may use short sales and derivatives. Gearing may be used to enhance returns and the Fund may be geared in excess of 100% of the Fund's Net Asset Value. There is a limit to net exposure of 150%. |
| Manager Comments | The Sharpe and Sortino ratios over the last year are 1.40 (0.41) and 2.95 (0.55) respectively with the Up and Down Capture ratios 0.59 and -0.36. At month-end the Fund had a net exposure of 5.9% and a gross exposure of 211%. We discussed the reasons for our cautious portfolio positioning in our last monthly (the end of QE in the USA, pressure on emerging market currency and commodity markets, US $ and Bond market strength) and despite the sharp rebound in some equity markets (particularly the US) many of these conditions are still in place (or intensifying) as we sit here in mid-November. Volumes (and share prices) in the mid cap space appear to be sliding with investors increasingly gravitating to a small number of (extremely expensive) growth stocks while at the large cap end banks and yield plays have been bid back up aggressively. |
| More Information | » View detailed profile of this fund |
The Paragon Fund
17 Nov 2014 - Australian Fund Monitors
The Paragon Fund returned -2.50% (ASX 200 Accum 4.43%) during October with annual returns at 23.80% (Index 6.39%) with a volatility 14.39% (Index 10.33%).
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17 Nov 2014 - The Paragon Fund
By: Australian Fund Monitors
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| Fund Overview | Paragon accepts that markets are not always efficient in pricing information into securities and that no one investment style works in every stage of the investment cycle. Subsequently Paragon adopts a top down thematic led approach to identify companies exhibiting sustainable or improving returns on capital driven by volume growth, pricing power and competitive advantages. Paragon utilises both quantitative analysis to provide probability weighted high/low/base case valuations and qualitative analysis in assessing management, the business model and likely direction of returns. Paragon will allocate assets to each investment opportunity based on a risk/reward profile. Positions have defined investment parameters and risk limits, which are then monitored on an ongoing basis. |
| Manager Comments | The since inception (Feb 2013) Up and Down Capture ratios are notable at 0.82 and -0.65. Key drivers of the Paragon Fund performance for October included solid returns from Regis Healthcare and our short position in Syrah Resources, offset by falls in LNG Ltd, TFS Corp and our short position in Transfield Services. At the end of October the fund had 26 long positions and 5 short positions with a net exposure of 72.8% and a gross exposure 91.8%. |
| More Information | » View detailed profile of this fund |
Cor Capital Fund
13 Nov 2014 - Australian Fund Monitors
Cor Capital Fund returned -0.13% during October bringing the annual return to 1.72% with a volatility of 3.43%.
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13 Nov 2014 - Cor Capital Fund
By: Australian Fund Monitors
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| Fund Overview | The Cor Capital Fund is a Multi- Asset Fund which combines a pre-determined strategic asset allocation with active but systemised rebalancing to generate returns and manage volatility whilst maintaining transparency and liquidity. The Fund strategy is not reliant on accurate market predictions, forecasts or timing for success. Returns are generated in a number of ways; 1) by maintaining sufficiently large positions in a diverse group of asset classes, 2) via the 'volatility harvesting' consequences of active rebalancing, and 3) from the offsetting behaviour of certain asset classes under specific conditions. The combined portfolio is expected to exhibit relatively low volatility and low turnover. In the interests of avoiding complexity, maintaining liquidity, and minimising reliance on third parties, the Fund strategy does not employ gearing, derivatives or short-selling. |
| Manager Comments | Equities continued to be volatile, with the ASX200 Accum Index making up most of September's fall (+4.43%). Strong bond (+0.97%) and equities (+2.2%) performance within the Fund portfolio was offset by a weaker gold bullion price (-3.56%). The recent increase in volatility has not been sufficient to cause a breach in any of the Fund's defined asset class limits and so there were no changes during the last month. |
| More Information | » View detailed profile of this fund |
Optimal Australia Absolute Trust
12 Nov 2014 - Australian Fund Monitors
Optimal Australia Absolute Trust returned -0.71% in October with annual returns at 5.42%, with a volatility of 2.08%.
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12 Nov 2014 - Optimal Australia Absolute Trust
By: Australian Fund Monitors
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| Fund Overview | The Fund's bias is likely to be net long under normal market conditions, with the core strategy being to construct a portfolio of listed equity securities priced at levels that do not adequately reflect their underlying value. The Fund will seek to boost returns and limit potential market downside by selective short selling of individual stocks which are priced at levels that are viewed as materially above their underlying value. The Fund will also use certain trading strategies both within its core portfolio (through rebalancing stock weights and overall market exposure in response to price movements) and in certain other situations (typically of a shorter-duration and/or opportunistic nature) with the objective of further increasing returns. |
| Manager Comments | The Fund recorded 83% positive months over the last year and a maximum draw-down of -0.71% as compared to the Index at 5.38%. Not only did the market post a solid rebound, but the stocks leading that recovery were exactly the same group of yield-based so-called 'defensive' industrials and financials which so dominate index construction. The stats here are instructive: the ASX 20 stock index now represents 68% of the ASX 200 index, compared with 55% just prior to the 2007 market peak. Banks are now 31% of the ASX 200 index, and the financials overall represent 47% ― an all-time high. So: investors in the Australian stock market are assuming concentration risk of unprecedented proportions, and this skew in index concentration typically occurs at market extremes. |
| More Information | » View detailed profile of this fund |
Bennelong Alpha 200 Fund
11 Nov 2014 - Australian Fund Monitors
Bennelong Alpha 200 Fund returned -2.49% during October with a net exposure of 1.2%.
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11 Nov 2014 - Bennelong Alpha 200 Fund
By: Australian Fund Monitors
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| Fund Overview | The core investment strategy of the Fund consists of the active selection of a series of paired long/short investments in Australian listed equities based upon the Investment Manager's fundamental research. The strategy seeks to capture stock Alpha whilst limiting portfolio exposure to market risk by adopting a dollar neutral portfolio market exposure position with the tactical capability to take net exposure of up to +/- 20% of gross assets. Stock selection is based on fundamental analysis to derive a view of a pair of individual stocks. The Investment Manager is style neutral in determining the stock's positioning. This primary 'pairs' strategy may be enhanced by other complementary strategies, including event driven, security and takeover arbitrage, thematic and momentum trading. The paired stock positions comprise long and short correlated securities that are in most cases simultaneously opened. A portfolio of approximately 30-100 stocks will be selected and actively managed in 15-50 pairs to comprise the core minimum (60%) of the Gross Asset Value. Up to a maximum of 40% of the portfolio's Gross Asset Value may be invested in uncorrelated securities and/or uncovered (long and/or short) positions. These 'satellite' positions are intended to enhance returns and to balance overall portfolio risk. In this regard, the Investment Manager recognises that it is not always possible to achieve a suitable paired profile within the S&P/ASX 200, and that a high conviction long or short stock idea might not always have a suitable pair. |
| Manager Comments | The fund had a very disappointing month in October. Our long book contributed positively but was overwhelmed by the negative contribution from the short book. At the sector level Consumer Discretionary and Financials dragged on performance, with iProperty /Trade Me and Cedar Woods / Stockland the main culprits. The three best performing pairs (Kathmandu / The Reject Shop & Pacific Brands, Carsales / Automotive Holdings, CSL / Primary Healthcare) all benefited from being on the right side of AGM comments. There was no common theme to our poor performing pairs. |
| More Information | » View detailed profile of this fund |
Morphic Global Opportunities Fund
10 Nov 2014 - Australian Fund Monitors
Morphic Global Opportunities Fund returned 1.12% during October bringing the annual return to 15.62% with a volatility of 8.62%.
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10 Nov 2014 - Morphic Global Opportunities Fund
By: Australian Fund Monitors
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| Manager Comments | The Fund's since inception (Aug 2012) Sharpe and Sortino ratios are 2.34 and 7.29 with 78% positive months. The Fund is not as heavily invested in Japan as it has been, but stocks there still contributed significantly to performance. This was thanks to continued strong gains in the Japanese Drug Stores basket, and currency hedging put in place early in the month, which paid off substantially when the BOJ launched its last day of the month surprise and the Yen fell nearly 3% in a few hours. The Fund closed the month fully invested, reflecting confidence the worst macro economic shocks are probably behind us for the balance of the year. The Fund has hedged most of its Japanese stock exposure to protect against further Yen weakness. |
| More Information | » View detailed profile of this fund |
Monash Absolute Investment Fund
7 Nov 2014 - Australian Fund Monitors
Monash Absolute Investment Fund returned -0.3% in October with 12 month performance at 4.83% with a volatility of 8.02%.
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7 Nov 2014 - Monash Absolute Investment Fund
By: Australian Fund Monitors
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| Fund Overview | The fund seeks to identify opportunities in the share market to make positive returns (long and short) irrespective of market conditions. It is style agnostic, as compelling investment opportunities exist across all investment styles from time to time. The Fund places a high priority on capital preservation, and has an absolute return focus in accepting market risk. The Manager's experience across value, growth and discounted cash flow styles allows them to use a comprehensive approach to investment decisions that applies all three. They also have the patience to seek out only compelling opportunities, rather than settling for relative value. The portfolio is somewhat concentrated, looking to diversify across industries and themes, rather than by trying to stay near an index. The portfolio may at times have a large amount of cash or other protection. However once investments are made turnover may be relatively high in order to lock in gains and avoid losses. |
| Manager Comments | It was a volatile month with the market initially selling off and the Fund took action to preserve the Fund's capital. As a result it lagged the market as it recovered, which ended up costing the portfolio about 1%. The negative return was not due to any bad news associated with the Fund's stocks. The portfolio was very active during October, as we closed/opened Event Driven opportunities and added to some of the Outlook Driven stocks in weakness. The most significant trade of the month was exiting Greencross, one of our Outlook Driven stocks, which had gone up 104% over the 20 months that we owned it. |
| More Information | » View detailed profile of this fund |
Fund Review: Nanuk Global Alpha Fund AFM Fund Review September 2014
6 Nov 2014 - Australian Fund Monitors
Nanuk's strategy is based on increased economic development, the limitations of conventional energy sources and proliferating energy security issues that are leading to long-term structural shifts in the way energy is generated, managed...
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6 Nov 2014 - Fund Review: Nanuk Global Alpha Fund AFM Fund Review September 2014
By: Australian Fund Monitors
Nanuk Global Alpha Fund AFM Report September 2014 (pdf format)
NANUK GLOBAL ALPHA FUND
Attached is our most recently updated Fund Review on the Nanuk Global Alpha Fund.
CPD Points are now available for all AFM Fund Reviews. Read the review and answer 5 questions to earn half a point toward your continuing professional development.
- Nanuk's strategy is based on increased economic development, the limitations of conventional energy sources and proliferating energy security issues that are leading to long-term structural shifts in the way energy is generated, managed and consumed. Similar pressures are causing changing landscapes for food, water and environmental management. These developments present a range of innovative and compelling investment opportunities.
- Nanuk has identified a large, diverse global universe of companies positively exposed to these shifts. Nanuk combines deep fundamental research into these companies with detailed analysis of technological development, policy direction and related economics within each of the relevant sectors to identify profitable trends and opportunities suitable for inclusion in the Fund.
- Nanuk's principal strategy is to invest, long and short, in securities that are mis-priced on an absolute or relative basis. The Fund aims to achieve long term capital appreciation while reducing volatility of returns and risk of capital loss through appropriate hedging and risk management strategies.
For further details on the Fund, please do not hesitate to contact us.
Research and Database Manager
Nanuk Global Alpha Fund AFM Report September 2014 (pdf format)
Microequities Deep Value Microcap Fund
5 Nov 2014 - Australian Fund Monitors
Microequities Deep Value Microcap Fund returned 1.66% during October as equity markets rebounded, with 12 month performance at 16.37% and a volatility of 7.41%.
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5 Nov 2014 - Microequities Deep Value Microcap Fund
By: Australian Fund Monitors
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| Fund Overview | The objective of the Fund is to identify undervalued Microcap companies, invest in them and, through a medium to long term commitment, attempt to deliver superior investment returns. The Fund invests primarily in ASX listed Microcap companies, which at the time of initial investment are generally below a market capitalisation of A$250 million. The Fund may also invest in companies with a higher market capitalisation, but these will be limited to no more than 20% of the assets of the Fund. At times the Fund may invest in pre-IPO securities that are due to be listed on the ASX within 3-6 months, and have lodged a prospectus with ASIC. These investments will also be limited to no more than 10% of the assets of the Fund. The Fund will be limited to investing no more than 20% of the Fund's assets in any one security or company. The Fund will make investments with a medium to long term time horizon of between 3-5+ years. The Fund will not speculate in derivatives. It will be permitted to hold other securities that are directly associated with a particular investment such as options granted with a specific company issue etc. The Fund will not engage in short selling or stock lending. The Fund will not hold financial debt of any kind. |
| Manager Comments | Since inception (March 2009) performance is sound at 28.49% pa as compared to the ASX 200 Accum Index at 13.51% pa. Up and Down Capture ratios over the same time are 1.13 and 0.26 respectively. After almost six years of what was originally viewed as a radical policy the US Federal Reserve announced last month that it would end its final purchase of bonds. The program of quantitative easing rapidly expanded the Fed's balance sheet. In macroeconomic management, isolating the causality of policy measures is never a conclusive exercise. Objectively however we can safely say the quantitative easing program certainly contributed positively to steering the US economy back to life from the precipice of the GFC. Inflation has remained low, the currency has not lost its allure as the world's most sought after legal tender and unemployment (albeit slowly) has declined to acceptable levels. Despite the end of quantitative easing, the monetary policy of the Fed remains extraordinarily accommodative. |
| More Information | » View detailed profile of this fund |
